Owning a home is one of the biggest American dreams. However, the capital-intensive investment may not be everything it’s hyped up to be. In most cases, people have found renting to be a great alternative to home ownership, especially because it offers flexibility and less financial stress.
MRK analyzes the major benefits of renting over home buying and has distilled the most important benefits into this article. Unsure whether to buy a house or keep renting? Below are some important things to know before putting in a deposit.
Renting Does Not Require Maintenance Costs or Repair Bills
Homeownership is a work in progress. Most homeowners discover this after they’ve paid their deposits and moved into their new homes. With home ownership, owners are expected to maintain their property and carry out regular repairs to keep the property in tip-top shape. Those repairs and maintenance often don’t come cheap.
Renters, on the other hand, are less burdened by repairs and maintenance costs, especially as they can easily call their landlords to fix the problem. Cost-wise, renters have a higher disposable income as they won’t have to worry about maintenance, repairs, and renovation or remodeling costs.
Renters Have Better Access to Amenities
The quality of a person’s life is hugely impacted by their access to amenities. Homeowners are often constricted in the type of amenities they can access, especially as properties nearer to those amenities may cost more to purchase than those farther off. On the other hand, renters can easily access these amenities by renting existing properties closer to their desired amenities.
In addition, homeowners may take on high costs if they bring amenities like an in-ground swimming pool to their property. Renters, on the other hand, do not have to pay anything extra to have such amenities available to them, especially as those installations are often seen as upselling the property to make them more desirable to renters.
Renters Don’t Worry About Real Estate Tax
Real estate taxes can burn a hole in a homeowner’s wallet. This major expense is avoided by renters whose only worry is paying their rent from month to month.
Homeowners often face varying real estate taxes, especially as this cost varies from county to County, or from state to state. It can also be complex to calculate property taxes, especially as they are determined based on the property’s value as well as the amount of land upon which it is built. New construction properties or custom homeowners may face higher sums.
Renters Don’t Worry About Down Payments
Down payments are a huge part of the property purchase process. Down payments are seen as an investment and commitment from the buyer in the property. In most cases, a down payment can range from as low as 3 percent to as high as 25% of the property’s value. This amount can burn a significant hole in the property buyer’s wallet, especially if they’ve been saving up for years.
Renters don’t have to worry about such financial commitment, giving them more flexibility to invest their monies in other ventures.
Renters Have Greater Location Flexibility
One of the biggest advantages of renting over owning a home is the flexibility of choosing where to live. Renters can live in different areas within a city or live in different cities, depending on what works for them. This flexibility allows them to take jobs anywhere, especially as they aren’t tied to a location. Learn about maximizing property value
On the other hand, homeowners do not have such flexibility. Homeowners may be more constrained to their local environment, making it harder for them to explore opportunities without suffering financial consequences.
Renters Don’t Worry About Decreasing Property Value
Renters can move on from one house to another, paying the agreed amount in rent, without worrying about the property’s current market value or how economic situations affect the property. On the other hand, property owners are continually worried about their equity and investment in their property.
Property owners may also be forced to lose some value on their property, especially when they’re in a bad financial situation and looking to sell quickly. They may sell when the real estate market is in a recession and this can significantly lower the value of their property as well as the selling price.
Renters Can Flexibly Downsize and Upgrade
Renters have the flexibility to downsize and upgrade their living conditions to reflect their current earnings. This is a great advantage, especially as they can make situation-specific decisions without worrying about taking on additional costs.
Homeowners do not have such flexibility or luxury. They are bound to their property, which may be too expensive to manage in some situations. Those looking to upgrade may also face the daunting task of selling their homes for a good price before upgrading.
Knowing the above factors can help you to decide better what you want in terms of flexibility or stability. It’s best to rent if you’re more interested in flexibility. Homeownership works best when your goal is stability.
